Thoughts From the Frontline, February 2003

The Muddle Through Middle: Why Stocks Drop While the Economy Grows

February 28, 2003

In most issues of this weekly letter, I spend our time together looking at specific trees and various flora, commenting upon how they affect the overall economic forest. Today, it is time to drop back and look at the forest as a whole, given that we may be on the precipice of events that could change the very character of the forest in which we live.

I am going to do so as a way to frame what I think of as the rationale for my economic world-view. I believe we are in a Muddle Through Economy...

Healthcare, Oil Shocks and Deflation

February 21, 2003

This week we have seen a lot of conflicting stories on the economy: worries about an oil shock leading to a double dip recession and more deflation, a surprise increase in the Producer Price Index but only a slight increase in the Consumer Price Index. Unemployment claims went up, while retail sales were down while the Wall Street Journal says they went up. We examine what these could all mean this year, as my Muddle Through scenario faces some stiff winds. We also look at the long term...

Greenspan Fiddles and the French Dance

February 14, 2003

Sometimes it is the small things that lead to big changes. Today we briefly look at one paragraph in Greenspan's latest speech, then move on to Europe and Iraq. I want to suggest some small things that could lead to changes in global politics and the world economy just as significant as the fall of the Berlin Wall. My theme for 2003 was Surprise and Transition." I think we are getting ready for our first true surprise. Again, there is a lot to go over, so let's get started.

The Most Dangerous Threat to Your Retirement

February 7, 2003

Today I discuss one of the most dangerous threats to your retirement and then we listen to a few seasoned pros tell us why the market is not going up. It should make for an interesting session, so let's get started.

I got the following email from a reader yesterday which so upset me I decided to make it the lead for this week's letter. Quote: